First of all, we have to know what is e-commerce? So, e-commerce is buying and selling of goods through the internet. Let’s discuss business models.
6 Main Business Models in E-commerce
- B2B- Business to Business
- B2C- Business to Consumer
- C2C- Consumer to Consumer
- C2B- Consumer to Business
- D2C-Direct to Customers
- B2G-Business to Government
- Conclusion
- Frequently Asked Questions
B2B- Business to Business
In this B2B business model, one business sells the products or services to another business. This model used to sell its product or service to the intermediate and after that, the purchaser can sell it to its end-user i.e., consumers.
For example, a business sells its item to the wholesaler or any other business, and then that business the wholesaler can sell it to the consumers.
Some popular examples of B2B business model:
- Flexfire LED.
- Atlanta Light Bulbs.
- Selini NY.
- Berlin Packaging.
- BuySwings.
- BulkBookstore.
B2C- Business to Consumer
In the B2C business model, the business directly offers the products or services to the customers.
In this type, the business uploads the items to its site and the users can see the product there and can order the same, after this the company sends the email to confirm the order and dispatch the same.
The decision-making process is much shorter in the B2C business as compared to B2B. Because in this model the company directly sells to the customers that is why it takes less time.
For example: If you want to purchase something through online platforms so you just have to search the product to that site and simply order the same and the order will be dispatched to deliver to your doorstep.
Following are some popular examples of the companies who conduct their business over the B2C model:
- Amazon
- Overstock.com
- Wal-Mart, etc.
C2C- Consumer to Consumer
B2B and B2C are the most commonly used online businesses the people know about it. But the C2C is the business model the people don’t know about it very much. But this type is being expanded and growing rapidly.
Most people are getting to know about it anyway.
In this consumer to consumer(C2C) business model, the consumers sell and purchase things over the internet, which means the end consumer sells the product to another end user i.e., the consumer.
Many online sites offer and encourage consumers to buy and sell their things through their websites or app.
In these types of websites mostly the consumers used to sell and buy second-hand products and these products are their private properties like bikes, cycles, cars, and so on.
For example, If a person wants to sell his old bike so what he can do is upload all the details and pictures of his asset (bike) to a website that offers to the consumers to sell and purchase their product over their site.
One of the good and famous examples of this is OLX which offers the consumers the same. So, through this site.
The interested candidate can contact and proceed with their commerce or business. And this called a C2C business model where the ultimate consumer is selling the product to another end consumer.
Following are some popular examples C2C business model:
- Amazon and eBay are the most popular and giant platforms of C2C business.
- eBay is the platform that offers the consumers to trade through their website at any time from anywhere.
- Amazon has the mix of B2C and C2C business models. Amazon offers to businesses to sell and purchase online as well as the consumers can.
- OLX
- Quicker, etc.
C2B- Consumer to Business
This business model is also not the popular one, which means most people don’t know about it that much. But it is also being expanding itself and people get to know and it is spreading all over the world.
The C2B is the business model used to sell its product or services to the businesses which means that the end-user or the consumers sell its product or services to the different businesses. It is roughly like the sole proprietorship who serves to the businesses at large scale
For example:
- The webmaster and blogger who provides content or services to the companies by the way of Google AdSense and affiliation program are examples.
- The photographers and the designers who sell the photos stocks of their artwork to the companies by the way of Fotolia and Istockphoto are the examples.
- Following are some examples of C2B business model:
- Google AdSense
- Affiliated program
- Fotolia stock photo
D2C- Direct to Customers
The direct to customer method is now getting popular in these days. In this business model, the product or the services are directly provided to the consumers by the business.
No middle man is there in the chain of delivering the product to the customers. The manufacturer doesn’t use any middle man or the intermediary chain for providing the product to the consumers. The manufacturer directly sells the goods or services to the consumers.
For example, If you want to buy shoes so you can just go to the website of the shoe brand you want. The most popular example for this is Adidas they used to manufacture the product as well as sells the product by itself, they have the physical store as well as the online website.
Following are the top D2C business model companies:
- Reformation
- Warby parker
- Glossier
- Rituals The honest company, and so on.
B2G- Business to Government
B2G stands for Business to Government. The B2G businesses sell their products, services, or information to the government or government agencies. These types of companies do a pre-negotiated contract.
The government tenders bids for the contract this bidding is decided before hiring the company for the project. These businesses only deal with the central government, state government, and local government.
The top businesses of B2G model are as follows:
- OpenGov
- Riskpulse
- Skycatch
- Senseware
- Metropia
Conclusion
In this article, we have discussed the various business models in e-commerce. Let’s find out which business model is suitable for whom. So, let’s get start concluding the same.
The B2B business model is used by companies that sell their products or services to other companies. So, if you are a new startup or new growing business then it is not for you. This takes huge investment because this type does its business on a large scale.
For the startup companies, the B2C and D2C are the best models because it cuts the intermediates and more margin or profit is there for you.
The B2C business model is the most popular and most common these days. And other business models are also growing as per the requirements of the people.
Also read online earning ideas
Frequently Asked Questions
The biggest issue faced by non-profit organizations and NGOs are the revenue generation and reduce donor dependency. So, that they can generate their revenue and won’t be longer dependent upon the donors.
The non-profit sectors are looking for business models through which they can generate revenue, so here are some solutions for the same.
Following are some business models that are suitable for non-profit organizations:
1. Sell directly to the customers:
The NPOs can sell their products directly to their customers who are also the beneficiaries of these NPOs. The benefit of selling direct to customers is that they don’t need any agents or intermediates so they can earn revenue and can use it for the growth of the organization.
2. Set up a side business:
The NOPs can set up a side business and earn profit for the organization. The form that side business they can generate revenue and don’ have to depend upon donors and other sponsors and it will help them to expand their organization.
3. Develop a value:
The NPOs develop their value certificates which certified their organization’s values, social services, and other standards. It helps the organization to attract more customers and beneficiaries.
The business model canvas is a strategy for management in developing the new startup business and also for the existing businesses.
The business model canvas is a visual chart that helps businesses to understand their business model, it also tells how you can make money.
That visual chart describes the firm’s or a product’s value elements value proportion, infrastructure, customer, and finance. The business model canvas was created by Alexander Osterwalder, of Strategyzer.
The business models are changing very fast. The traditional way of business was an offline business that is now shifted to online.
People love to do online sell and purchase. It is beneficial for both the buyer and the seller.
The most knowingly business models are B2B and B2C. These two are the most popular ones and B2C is the most commonly used one. In our day to day lives, we used to do sell and purchase through this model.
But the business models are changing and there are so many other business models available where a consumer can do business with other businesses without any investment. Consumers also can sell purchases with each other. So this is the way how business models are changing.
Startups are born out of the big and innovative and bright idea. But, even the idea is very innovative and luminous it can be fade, fail, and die if the execution of the business is not right. So, there needs to be a profitable and suitable business model.
Here are some ideas for the startup.
1. Your target market:
First of all, you need to test that your idea is viable. Research your target market and you need to get the scope of your possible customers, and there must be a need for your product or service to satisfy. If only a few customers are interested in what you are offering, so it is better to quit that idea and research for another.
2. The competition:
When you have an idea for a specific product or service and when you entering the market you should know that who you’ll face against. You have to research how much competition is there in the market and how many traders are also there doing the same business or offering the same product or service.
Although it’s a good thing that there is competition it shows that your idea is good and there is the demand for the product or service in the market. But it carries more risk and there are chances to fail and there are fewer chances to attract consumers towards your business.
